“We have the duty, the Commission and the European Union, to do what we can to protect our European businesses, especially SMEs,” European Commission President Jean-Claude Juncker said in a statement, referring to small and medium-sized companies.

The Commission – the EU executive – said the European Parliament and member states could raise objections to the statute. But the measure could also be activated sooner if there was strong political support.

It also announced:

The start of the formal process of allowing the European Investment Bank to lend to EU projects in Iran

It would urge EU governments to explore “one-off” transfers to Iran’s central bank to help authorities to receive their oil-related revenues

It would continue and strengthen the assistance to Iran with Energy Commissioner Miguel Arias Cañete travelling to Tehran this weekend

What do the sanctions mean for Europe?

European businesses are worried that their ties with the US could be damaged if they continue doing Iranian deals.

Some of Europe’s biggest firms had rushed to do business with Iran after the nuclear deal took effect.

In 2017, EU exports to Iran (goods and services) totalled €10.8bn (£9.5bn; $12.9bn), and imports from Iran to the bloc were worth €10.1bn. The value of imports was nearly double the 2016 figure.

Now, there are fears that billions of dollars’ worth of trade and thousands of jobs could be jeopardised.

Some of the biggest deals that are at risk include:

French energy giant Total‘s deal, worth up to $5bn, signed to help Iran develop the world’s largest gas field. Total now plans to unwind those operations by November unless the US grants it a waiver

Norwegian firm Saga Energy‘s $3bn deal to build solar power plants

An Airbus deal to sell 100 jets to IranAir

Why is the US imposing sanctions on Iran?

Media captionIran nuclear deal: Trump announces US pull-out

President Donald Trump pulled the US out of the Iran nuclear deal earlier this month and pledged to ramp up pressure on the country.

The agreement was signed by six world powers, alongside Iran, to curbed Iranian nuclear activities in return for the lifting of UN, US and EU sanctions.

But Mr Trump has denounced the “horrible” deal, and now Washington is re-imposing the strict sanctions.